¶1. SUMMARY: Ambassadors May 19 and June 2 visits to Cebu
highlighted the broad range of U.S. interests and
activities in the area. The Cebu metro area is second only
to Manila in the size of its population and economy. Over
100 American businesses operate in Cebu, including Timex,
Lexmark International, and Fairchild Semiconductors. Local
leaders exhibited a strong sense of optimism and
willingness to address business constraints. Local leaders
also cited the December 2006 12th ASEAN Summit as an
example of Cebu’s dynamism. The Ambassador also swore-in
Peace Corps Volunteers and visited the Cebu Consular
Agency. END SUMMARY.

¶Y.

¶2. The Ambassador began the May 19 visit by touring Timex
Philippines state of the art manufacturing and
distribution facility, which produces 80% and distributes
100% of all Timex watches. Timex was the first company to
operate in the Mactan Export Processing Zone (MEPZ), a
successful and growing government-private sector
partnership of over 100 firms including U.S. technology
leaders Lexmark International and Fairchild Semiconductors.
These are among the approximately 100 American businesses
in the Cebu area employing 25,000 staff, the largest ten of
which have over $600 million dollars in total annual sales.
The successful U.S. businesses and MEPZ are symbolic of
Cebus role as a business growth point with an
international orientation, and an illustration of the
entrepreneurial relationship between Cebus government and
the private sector.

¶3. Cebu’s international profile will be further
strengthened when it hosts the twelfth annual ASEAN Summit
it
in December 2006. The ten-member nations will participate
in regional discussions and witness the Philippines assume
the organizations chairmanship. Immediately thereafter,
Cebu will host the second annual East Asian Summit, which
includes ASEAN members and six ASEAN partners from South
Asia, East Asia and the Pacific.

¶4. The Ambassador hosted a working lunch with Cebu
Congressmen Antonio Cuenco and Raul del Mar, Provincial
Governor Gwendolyn Garcia, local government authorities of
Cebu and nearby Mandaue City, representatives of the
American Chamber of Commerce, and other business chambers.
These leaders acknowledged several constraints to business
growth, including electricity dependability and water cost,
but they also spoke enthusiastically of the options
available to address the challenges. Business leaders
described excellent collaboration with local officials, and
the Provincial Governor claims (the local government?) will
provide ample funds for infrastructure projects as she
seeks to expand the successes of metro Cebu throughout Cebu
Province.

¶5. As part of the Philippine Month of the Ocean
celebrations, the Ambassador officially launched several
coastal resource management programs to be implemented by
neighboring Lapu Lapu city government and civic
organizations with USAID support. This strong local
involvement and initiative demonstrates a solid
understanding of the direct link between protecting the
environment and the health of the local economy. Although
the welfare of the entire Philippines is directly connected
to the coastal environment, heavy investment in the tourism
industry makes the Cebu economy and population particularly
sensitive to environmental degradation.

¶6. The visit also included an interview on a top local
music/news radio station, where the Ambassador fielded
questions running the gamut from her professional biography
to the economy, President Bushs new immigration policy and
U.S. assistance for counterterrorism, counter-narcotics and
the efforts to fight trafficking in persons.

¶7. On June 02 the Ambassador swore in 28 new Peace Corps
volunteers who will serve in the Visayas region. Over 8,000
volunteers have served in the Philippines, the second
oldest Peace Corps program. The Ambassador also visited the
Cebu Consular Agency which replaced the Consulate in 1995.
The Agency primarily provides ACS services and had just
completed an outreach program in collaboration with
Department of Homeland Security and Social Security
Administration staff.